Economy
St. Louis closed Q3 at an unemployment rate of 3.7%, marking a 40-basis-point (bps) decline quarter-over-quarter (QOQ). The market's labor pool remained at approximately 1.4 million individuals and is not expected to fluctuate over the short term. The U.S. unemployment rate also recorded a decline of 10-bps year-over-year (YOY), closing Q3 at 4.2%. For the first time in over three years, the Federal Reserve raised interest rates to a range of 3.75% to 4.0% and will consider further increases to combat the rising costs of many goods and services.
Supply and Demand: Vacancy Decreases QOQ
Overall vacancy in the St. Louis industrial sector decreased by 10 bps QOQ, closing Q3 2026 at 4.9%. While the market recorded a decline in vacant direct space, vacant sublease supply increased to just over 1.2 million square feet (msf). After recording four straight quarters of negative net absorption, St. Louis reported over 1.4 msf of positive net absorption in Q3 2026, tipping the market's year-to-date (YTD) net absorption total positive to 621,843 square feet (sf). Additionally, quarterly new deal velocity in St. Louis surpassed the 2.0 msf mark in Q3 2026, making this the region's heaviest third quarter of new leasing since Q3 2022. The market has also recorded approximately 6.1 msf of renewals YTD, with 56.0% of these deals signed in Q3 2026 alone. St. Louis has recorded an uptick in new development in 2026, delivering just over 2.0 msf of new product YTD, all of which was build-to-suit (BTS). This is the first year that construction completions have surpassed the 2.0 msf mark since 2022. At the close of Q3 2026, there was an additional 2.2 msf of product under construction in the market.
Pricing: Asking Rents Rise Above $6.00 PSF
Overall triple-net (NNN) asking rents in St. Louis closed Q3 2026 at $6.04 per square foot (psf), up 14.8% YOY. This is the first time since Q4 2022 that industrial asking rents have surpassed the $6.00 psf mark. The manufacturing product type closed Q3 2026 at $7.38 psf, a notable YOY increase of 46.0%. The office service and warehouse/distribution product types recorded more moderate YOY increases, closing the quarter at $9.74 psf and $5.64 psf, respectively. Three of the seven industrial submarkets in St. Louis recorded QOQ decreases in overall asking rents, with the City recording the largest decrease of 8.3% QOQ.
North County
The North County submarket closed Q3 2026 with an overall vacancy rate of 6.8%, which marks a 30-bps decline QOQ. The submarket recorded positive occupancy movement in Q3 2026 for the first time this year, closing Q3 2026 with 124,967 sf in positive occupancy gains. However, annual net absorption in North County remained negative due to several large-scale moveouts in Q2 2026, most notably Whirlpool's vacancy of its former 556,287-sf warehouse facility in Earth City. As of Q3 2026, the submarket held the largest amount of both vacant direct and vacant sublease inventory at 3.4 msf and 504,276 sf, respectively. Despite this, tenant demand in North County remains strong at just over 1.5 msf newly-leased YTD, which accounts for 31.6% of the market's overall activity. The submarket has also recorded over 1.2 msf of renewals YTD. Overall asking rents in North County closed Q3 2026 at $5.40 psf, marking a QOQ increase of $0.45 psf.
Metro East
Overall vacancy in the Metro East has slowly decreased throughout 2026, closing Q3 2026 at 9.6%. The submarket recorded 890,456 sf of net absorption for the quarter, accounting for approximately 55.0% of the market's positive occupancy movement in Q3 2026. This brings the YTD absorption total in the Metro East to net positive 401,738 sf. Tenant demand in the market continues to favor the Metro East, with the submarket recording 1.2 msf of new leasing in Q3 2026, roughly 60.0% of the market's total activity for the quarter. This is the heaviest amount of quarterly new leasing recorded in the Metro East since Q4 2024. The submarket has also reported nearly 4.0 msf in renewals YTD, accounting for 65.4% of all renewal activity in the market. Overall asking rents in the Metro East have increased for four straight quarters, closing Q3 2026 at $4.49 psf, a QOQ increase of $0.12 psf.
West County
West County reported its first quarter of negative occupancy movement for the year in Q3 2026, closing the quarter with negative 36,137 sf of net absorption. This led to a slight uptick in vacancy for the submarket, up 20-bps QOQ to 4.6%. However, West County still leads the region in annual net absorption with 590,498 sf of positive net absorption recorded YTD. The submarket reported a slight decrease in demand in Q3 2026, with 26,407 sf in new leasing, this marked the lightest quarter of new deal activity since Q1 2025. In 2026, West County has recorded 325,560 sf of new leasing YTD, and 212,144 sf of renewals. There was just over 1.0 msf of new development underway in West County at the close of Q3 2026, 66.0% of which is BTS construction. Average asking rents in the submarket closed Q3 2026 at $8.02 psf, marking little change QOQ but an increase of $0.40 YOY.
